Sboll is Your Go-to Source for the Latest Finance News, Covering Markets, Banking, Investments, Economy and Stocks.
⎯ 《 Sboll • Com 》

Republican states to be hit hardest by proposed cuts in US debt ceiling fight

2023-05-19 22:54
By Andy Sullivan LAKE CHARLES, La. (Reuters) -In Washington, Republican U.S. Representative Clay Higgins has been a vocal advocate for
Republican states to be hit hardest by proposed cuts in US debt ceiling fight

By Andy Sullivan

LAKE CHARLES, La. (Reuters) -In Washington, Republican U.S. Representative Clay Higgins has been a vocal advocate for spending cuts. Back home in Louisiana, it's a different story.

The cowboy-hat wearing conservative regularly highlights federal funding for hospitals, bridges and ports in his district, while voting against the spending bills that include them as "unsustainable" and "socialist garbage."

Now as Republicans in Congress press Democratic President Joe Biden to accept trillion-dollar spending cuts to avert a debt default that could come as soon as June 1, Higgins must balance his small-government ideals with the needs of his constituents.

While Higgins easily won re-election in his solidly Republican district last year, his constituents rely heavily on federal dollars, especially after severe storms in 2020.

"I know so many people that need assistance," said Roy Willis, 79, one of roughly 200 homeowners in Higgins' district who received grants to repair storm damage to their properties.

A Reuters analysis of federal expenditure data found that Republican-leaning states like Louisiana stand to lose more than Democratic-leaning states under the spending cuts backed by House Republicans.

States that voted for Republican President Donald Trump got on average $2.12 in federal expenditures, covering everything from pension payments to military contracts, for every dollar paid in tax in the 2020 fiscal year, according to the analysis, which used figures collected by the New York State Controller. States that voted for Biden got $1.79 for every dollar paid.

Louisiana, among the poorest states, did even better, receiving $2.62 for every dollar paid. With 47% of state revenue coming from Washington in 2021, Louisiana was second only to Alaska in its reliance on federal funds, according to a Reuters analysis of Census data.

Representative Garret Graves, who represents a district next to Higgins, is the Republicans' lead negotiator in debt-ceiling talks with Biden.

Representative Steve Scalise, the No. 2 House Republican, oversaw the passage last month of the party's debt-ceiling proposal, which would cut over $4.8 trillion in spending in return for raising the $31.4 trillion debt cap.

As a member of the hard-right Freedom Caucus, Higgins was an early advocate for dramatic spending cuts, many of which ended up in the House bill.

In a prepared statement, Higgins said he is working to help his constituents and reduce the size of the federal government.

"While devoting myself to restoring fiscal sanity in Congress, I am a practical man and I follow the rules of Congress as I serve my constituents," he said in a prepared statement. He declined to be interviewed.

But in Higgins' district, a stretch of swamp and petrochemical plants that includes the city of Lake Charles, local leaders said they are looking for more money, not less.

The Republican plan does not specify program cuts, but local leaders have plenty of suggestions about what should be spared the budget axe: roads and bridges, according to Republican Mayor Nic Hunter. Stormwater drainage and child care assistance, according to state Representative Wilford Carter Sr., a Democrat. Affordable housing and job training, according to the local business association. Harbor dredging, according to port officials. Air-conditioning subsidies and other safety-net programs, according to a regional administrator.

"Nobody's talking about cuts," said Carter. "They call me about we need this project, or that project."

HURRICANE AFTERMATH

Lake Charles was flattened by Hurricane Laura in August 2020, followed by Hurricane Delta that October, and a winter storm and spring flood the following year.

Laura destroyed cranes and docks at the port, which ships liquid natural gas, chemicals, rice and other products. The storm destroyed half of the city's mature trees, derailed freight cars and caused a chemical fire.

The city's population dropped 5%. School enrollment is still down roughly 20% from pre-storm levels, and tattered blue tarps cling to many rooftops.

Willis' home was damaged when a tree came down in the first storm. He hopes the spending cuts backed by Higgins won't affect local efforts to provide affordable housing. "I'd say to him, keep on fighting to keep these programs going. There are so many people that are in the same position I was," Willis said.

Congress did not approve rebuilding aid for the region until more than a year after Laura, an unusually long delay that some pin on their representatives in Washington.

Only $32.5 million in federal rebuilding aid has arrived so far, according to the Louisiana Office of Community Development, out of $3.1 billion approved for the state.

"Our federal delegation could have done a better job," said Bryan Beam, administrator for Calcasieu Parish Police Jury, the regional governing body.

A former sheriff's deputy, Higgins built a reputation as a tough-talking "Cajun John Wayne" before winning election in 2016. On social media he has dived into the culture wars, tweeting that Biden is pursuing a "Satanic agenda" on religious issues, and referring to public libraries as "liberal grooming centers."

When it comes to spending, Higgins has been a solid "no" in Washington.

He voted against the 2021 infrastructure package, saying that it contained too many green-energy incentives. "It's a losing deal," he said at the time.

He voted against the last two bills that fund annual government operations, although they included $50 million for projects in his district and a proposal he wrote to expand veterans' health care, which is estimated to cost $70 million over the next five years.

Meanwhile, Higgins' office keeps a detailed timeline of his efforts to secure disaster aid and funding for a new freeway bridge, and issues a steady stream of press releases about federal awards in his district.

Mitch Landrieu, a Democratic former Louisiana lieutenant governor who now oversees implementation of Biden's infrastructure law, said the state's conservative-leaning leaders have often criticized the federal government while also trying to secure its help.

In Lake Charles, some local officials praise Higgins for pressuring the Federal Emergency Management Agency to release money for school repairs after the hurricane; securing $3 million in last year's government spending bill to weatherproof two local hospitals; and shaking loose an extra $9 million to build a holding pen for the muck dredged up from the channel that connects the port to the Gulf of Mexico.

"He's been extremely helpful," said Channing Hayden, the port's director of navigation, who credited Higgins for protecting roughly $50 million a year for the dredging operations.

Many local leaders are reluctant to criticize Higgins, who said in his statement to Reuters that he might publicly name the local governments that had not worked with him to secure aid.

For some local residents, Higgins' push for spending cuts in the face of so much need remains incomprehensible.

Diana Reynolds' home has been uninhabitable since Hurricane Laura, with black mold crawling up exposed wall studs.

She would have liked to sell her house to the government under a federally funded plan that buys up houses to create a green space to soak up flood waters -- but she said was told the funding has run out.

"It's almost like we've been forgotten about by the system. The government has failed us," she said.

(Reporting by Andy Sullivan; Editing by Scott Malone and Suzanne Goldenberg)